In 2006, it was announced that India Post would open a bank to erase its 1,000 crore deficit during the 11th Five Year Plan, emulating Poste italiane. In February 2013, it was announced that India Post had hired Ernst and Young to prepare a report on the proposed bank. Some officials of the Ministry of Finance had opposed the plan saying that India Post did not have the expertise to provide banking services such as handling credit.

In August 2013, the Planning Commission of India said that even though it supported the plan, it was not feasible owing to financial difficulties at the moment. It also felt that converting post offices into bank branches may hamper their original function In October 2013, the Cabinet of India rejected the proposal on the grounds that India Post did not have sufficient expertise in running a bank. In December 2013, India Post announced that it would install ATMs in 1000 of its office across India in the first half of 2014.

On 27 February 2014, India Post opened its first ATM in Chennai. In April 2014, the Reserve Bank of India (RBI) gave in-principle banking licences to IDFC and Bandhan Financial Services out of 26 applicants, but India Post was not considered for a licence because it had not received the mandatory clearance from the government. However, the RBI said that it would examine the proposal separately in consultation with the government.

In September 2014, a task force was formed by Prime Minister Narendra Modi which aimed to study ways in which the existing postal network could be leveraged. The task force was headed by T. S. R. Subramanian. On 4 December 2014, the task force submitted its report to Minister for Communications and Information Technology Ravi Shankar Prasad. The report said that more services should be provided in the field of banking, insurance and e-commerce.